Add-on assets disappearing in split screen

After the 1.21.130 update, all addon assets in any worlds turn invisible while split player co-op is active. I have also seen this occur on Xbox, in addition to PlayStation. The assets only return after closing the game and relaunching it as single player. Adding the split screen co-op reinitializes the issue. This has been appearing on several posts on social media as a widespread issue. I've attached another player's video of the bug from Reddit.

Steps to reproduce the issue:

1. Using a world with addon assets, such as blocks placed or items in inventory, add a split screen co-op player.

Expected result:

World is normal.

Actual result:

All addon assets become invisible.